After the creation of the European Single Market (ESM) the North American Free Trade Association (NAFTA) and Latin America’s Mercosur, there was only one major international trade groupings that needed to be created: one that would bring together the countries of the Asia-Pacific area.
The Trans-Pacific Partnership (TPP) was the answer to that need. Co-funded and supported by the administration of US President Barack Obama, TPP now has as members twelve countries that border both the Asian and the North American side of the Pacific Ocean. They are the US, Canada, Peru, Japan, South Korea, Vietnam, Malaysia, Singapore, Brunei, Australia and New Zealand. TPP’s membership can thus be said to be made up of four groups of countries – North America, Northwest Pacific, Southeast Asia and Australasia.
It is a powerful group of countries. Indeed, TPP’s membership makes it the most powerful of the world’s regional trade groups, for it encompasses five of the world’s fifteen largest economies— the US, Japan, South Korea, Canada and Australia—and a number of its leading emerging economies. The US economy is the largest economy in the world and the Japanese economy is the third-largest. TPP’s members account for close to 40 percent of total world trade.
With such a membership roster, TPP should by now be up and running. Unfortunately, something bad happened along the way. That something was the 2016 US Presidential election and the victory of the Republican candidate, Donald Trump.
Trump campaigned on a platform that included the virtual repudiation of globalization and the US’s withdrawal from all globalization-related US entanglements, such as free-trade arrangements. He claimed that the free-trade arrangements that the US had entered into had “robbed” America’s economy of production and jobs—especially the latter. He was particularly critical of TPP and NAFTA, and he vowed that one of his first things he would if elected would be to pull the US out of those two trade arrangements.
In keeping with his campaign promise, President Trump has taken steps in the direction of taking the US out of TPP and NAFTA. But thus far there has been no official US withdrawal from those two institutions.
America’s withdrawal from TPP and NAFTA would be bad for two reasons. First, withdrawal would deal a heavy blow to the concept of globalization, which is far superior to the international trade practices of the past. And, second, withdrawal would mean a trivialization of America’s international trade policymaking, reducing the US to a here-today-gone-tomorrow trade partner.
Faced with the realities of today’s geopolitics, Donald Trump was forced to execute a 180-degree turn on the issue of continued US membership in the North Atlantic Treaty Organization (NATO), shifting from a “NATO is obsolete” position to “NATO is not obsolete” stance.
Is the same shift likely to happen in the case of US—read Trump—membership in TPP and NAFTA? Given the persona and lack of governance experience of President Trump, it is not possible to say with certainty.
What can be said with certainty is that TPP without the US would still be an economically and politically viable proposition. It can proceed without the US. It should.
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